LLC Expense Cheat Sheet: 13 Tax Write-Offs for Small Businesses

Running a limited liability company (LLC) comes with plenty of benefits—including the ability to write off many business expenses and reduce your overall tax liability. For most small business owners, LLCs are treated as pass-through entities, meaning profits and losses pass through to the owners and are reported on their personal income taxes. That makes tracking and categorizing expenses even more important.

Why? Because every eligible expense you write off lowers your taxable income, and that means a lower tax bill come tax season. But to take full advantage of these business tax deductions, you need to know what counts, what doesn’t, and how to stay organized as you prepare for the tax filing process.

This LLC expenses cheat sheet includes common tax write-offs that can help you maximize deductions, reduce your income taxes, and keep more of what you earn.

Deductible Expenses vs. Non-Deductible Expenses

Not everything you spend money on can be written off, but many things can. To qualify as a deductible business expense, the IRS requires that it be both ordinary (common in your industry) and necessary (helpful for running your business). That means things like paying for office supplies, contractor services, or advertising typically count as deductible.

However, some expenses are not deductible, even if they’re related to your business.

Common deductible business expenses include:

• Office supplies and equipment
• Software and subscriptions used in daily operations
• Legal and professional fees
• Marketing and advertising
• Business travel and meals
• Insurance premiums
• Rent, utilities, and internet for your business location

Expenses that are generally not deductible include:

• Personal expenses (unless a business-use portion is clearly documented)
• Charitable contributions (may be deductible for C corporations, limited or not allowed for pass-through entities—learn more here)
• Penalties or fines paid to the IRS or other government agencies
• Loan principal repayments (though interest may be deductible)

Pro Tip: Always use a dedicated business bank account and credit card to keep your transactions separate. Mixing personal and business finances makes it harder to track legitimate deductions and could cause trouble if you’re ever audited.

Tax-Deductible Expenses For Your LLC

So, here’s your go-to tax deduction cheat sheet for LLC business expenses:

1. Startup Costs and Organizational Costs

When launching your LLC, certain expenses incurred before you officially open for business can be deducted. The IRS allows up to $5,000 in startup expenses and $5,000 in organizational expenses to be deducted in the first year, with the remainder amortized over 15 years. These deductions help lower your tax liability right from the start.

Common deductible startup and organizational expenses:

• Market research and competitor analysis
• Legal fees for business formation
• Filing fees with your state
• Creating your operating agreement
• Initial inventory and supplies
• Branding and early advertising efforts

2. Home Office Deduction

If you use part of your home regularly and exclusively for business, you may be able to deduct a portion of household expenses. This deduction is available whether you rent or own your home, and it can include indirect costs like utilities and mortgage interest.

Examples of deductible home office expenses:

• Portion of rent or mortgage interest
• Utilities (electricity, water, gas)
• Internet and phone service
• Homeowners or renters insurance
• Repairs and maintenance for the office space

3. Office Supplies and Equipment

Anything you use to run your day-to-day business—from pens to printers—can usually be deducted as a business expense. Small purchases are written off immediately, while larger equipment may need to be depreciated over time.

Common deductible supplies and equipment:

• Printer paper, pens, notepads
• Computers, monitors, keyboards
• Printers, scanners, and external drives
• Office furniture like desks and chairs
• Filing cabinets and storage solutions

4. Marketing and Advertising

Marketing is essential to business growth, and fortunately, the IRS allows you to deduct the costs of promoting your business. This includes both digital and traditional marketing, as well as branding materials and consultant fees.

Deductible marketing and advertising expenses include:

• Facebook, Google, or LinkedIn ads
• Website development and hosting
• Graphic design services
• Business cards, flyers, and brochures
• Swag and promotional giveaways
• Marketing agency or consultant fees

5. Travel Expenses and Meals

Business travel costs are deductible if the primary purpose of the trip is work-related. Meals during travel or meetings can also be deducted—typically up to 50%—as long as they’re directly related to business and properly documented.

Examples of deductible travel and meal expenses:

• Flights, trains, or rental cars for business travel
• Hotel accommodations and lodging taxes
• Parking, tolls, and rideshares
• Business meals with clients or partners
• Meals while traveling for work

6. Vehicle Expenses and Mileage

If you use your vehicle for business purposes, you can deduct either the actual expenses or use the IRS standard mileage rate. The key is keeping detailed records to prove the business use of your vehicle.

Deductible vehicle-related expenses may include:

• Mileage (tracked using a logbook or app)
• Gas, oil changes, and maintenance
• Auto insurance premiums (business portion)
• Lease payments or depreciation
• Parking and tolls for business travel

Pro Tip: If you drive for business, the standard mileage rate can be easier to manage than tracking actual vehicle expenses. Just make sure you keep a mileage log that notes dates, destinations, and business purposes.

7. Professional Services and Contractors

Fees paid to outside professionals who help you operate or grow your business are deductible. This includes independent contractors, tax professionals, and legal advisors who are not employees of your LLC.

Examples of deductible professional service fees:

• Tax preparation or accounting services
• Legal consultation or legal fees
• Independent contractors (1099 workers)
• Business consulting or coaching
• Bookkeeping or payroll services

8. Insurance

Insurance premiums that protect your business, employees, or assets are generally deductible. This includes general liability policies, cyber liability coverage, and more, as long as the policies are tied to your business operations.

Deductible insurance premiums may include:

• General liability insurance
• Professional liability (E&O) insurance
• Workers’ compensation (if you have employees)
• Cybersecurity insurance
• Commercial property insurance
• Business interruption insurance

9. Education and Subscriptions

Investing in education that helps you maintain or improve your current business skills is considered a deductible expense. Subscriptions to industry tools, publications, or online platforms also typically qualify.

Deductible education and subscription costs:

• Online courses or webinars related to your field
• Conferences and business events
• Professional association memberships
• Industry-specific magazines and journals
• Learning platforms (e.g., Skillshare, LinkedIn Learning)

10. Retirement Contributions

If you’re self-employed, contributions to a qualified retirement plan reduce your taxable income while helping you save for the future. Plans like SEP IRAs and solo 401(k)s offer flexible contribution limits and strong tax benefits.

Retirement plans for LLC owners that may qualify:

• SEP IRA contributions
• Solo 401(k) elective deferrals and employer match
• SIMPLE IRA contributions (if applicable)
• Defined benefit plans (for high-income earners)

11. Utilities and Phone

Utilities that support your business operations—whether from a commercial office or your home office—are typically deductible. Business-only phone lines and internet services are also considered necessary expenses.

Common deductible utility and phone expenses:

• Business phone line or VoIP service
• Internet service used for business
• Electric, gas, or water bills (home office portion)
• Trash collection (for a physical business location)
• Mobile phone (business use percentage)

12. Software and SaaS Tools

Any digital tools or software subscriptions you use to run your business may be written off. This includes platforms for productivity, accounting, communication, and customer management—as long as they support your business activities.

Examples of deductible software and SaaS tools:

• Accounting software like QuickBooks or Xero
• Project management tools like Asana or Trello
• Design tools like Canva or Adobe Creative Suite
• CRM platforms like HubSpot or Salesforce
• File storage like Dropbox or Google Drive

Pro Tip: Make a habit of reviewing all recurring expenses—like SaaS tools and marketing platforms—at least once a year. Canceling unused subscriptions helps your bottom line and ensures you’re only claiming deductions for services you actually use.

13. Depreciation and Section 179 Deductions

Larger business assets can be depreciated over time, or fully written off in the year of purchase using Section 179 (up to the IRS limit). This deduction applies to tangible assets used in your business for more than one year.

Assets that may qualify for depreciation or Section 179:

• Computers, monitors, and office furniture
• Machinery or equipment
• Business-use vehicles (some restrictions apply)
• Point-of-sale systems
• Tools used in trade or manufacturing
• Improvements to nonresidential property

Keep More Of Your Business Income By Writing Off Your LLC Business Expenses

Staying on top of your LLC’s expense tracking lets you reduce your overall tax liability. But one of the most common mistakes we see is failing to separate personal expenses from business ones. Make sure you use a dedicated business bank account, store your receipts, and document every transaction clearly.

At OTB Tax, we don’t just file your tax return—we help you find every legal deduction you’re entitled to. We work with small business owners every day to lower income taxes and optimize business operations.

Need help reviewing your LLC’s expenses or navigating tricky rules around startup costs, depreciation, or business loans? Reach out today to schedule a tax strategy session—we’re here to help you relax more and tax less.